How Bellway Homes is adapting its development approach to the new biodiversity net gain (BNG) framework.
This is a fundamental shift in the way biodiversity is viewed as part of the development process. It’s about making sure we approach BNG with the right mindset and delivery strategies.
Group Head of Biodiversity, Bellway Homes
Against the backdrop of a housebuilding market that Bellway’s Neil Beamsley described as “on the up but still challenging”, we talked to him about what mandatory biodiversity net gain will mean for developers.
Key facts:
While acknowledging that BNG adds further complexity to the existing challenges of obtaining local planning authority (LPA) go-ahead for new housing development, Neil believes there are good reasons for the development sector to embrace the scheme positively.
“Rather than seeing it as an immediate problem, we should see it from a customer point of view – if you can say you're going to build homes in a green, biodiverse landscape, that's a strong sales offer and great basis for a new community. So, I think it's about making sure we approach it with the right mindset and the right delivery strategies.”
Besides that commercial driver, he adds: “The fact is, I think we are dealing with a global biodiversity issue, so we have to do something. Discretionary approaches haven’t always worked, and I think it’s fantastic that BNG is underpinned by legislation. If it’s backed up and supported in the way it should be, then it has the ability to deliver some genuine biodiversity benefits.”
Neil says the priority for Bellway is to deliver as much of the required 10% BNG within its redline boundaries, in line with the statutory mitigation hierarchy. This means taking greater care in selecting land for development. “Ideally, we’re looking for an arable or low-quality grassland location – a blank canvas site essentially,” says Neil. “Sites with existing better quality habitat makes BNG delivery far more challenging ”
It is also adjusting its landscaping strategies to create better scrub and grass habitats, more woodland areas and ensure there is also greater water biodiversity.
Neil suggests developers may need to consider aiming for higher than 10% BNG. “If in five years’ time we have a really dry summer or really wet winter, some of the habitats created could fail and then won’t comply with the minimum 10% statutory process. So, we're informally aiming for 10%+ to create a buffer.”
Even where developers succeed in meeting BNG commitments onsite, Neil says they still face the challenge of how to guarantee 30-year habitat management once homeowners move in: “Resident management companies, for example, aren’t generally conservation management specialists so we’re working with various managing agents to help ensure they have the skillset to deliver BNG requirements.”
For Neil, the current lack of offsite BNG options is a major concern for developers struggling to deliver the required level of BNG at existing sites.
There has been a lack of engagement with some Local Planning Authorities, Neil suggests, to engage with offsite BNG through section 106 agreements – either because they prefer their own offsite solutions or because they are still getting up to speed with BNG process. The other option for BNG schemes, through a conservation covenant, is limited by the low number of bodies presently able to approve such agreements.
Neil says this is a real concern: “The market for offsite BNG units is nascent at the moment and there isn’t enough choice in the market. What we’re seeing is a developing lag in terms of what's starting to be required versus what's actually available to purchase on the market and that’s fast becoming quite a tricky problem.”
Lack of choice in the offsite BNG market has also driven up prices, which risks making some developments commercially unviable. Neil reveals: “Even for more straightforward sites, we’re struggling to find the right type of units in some local authority areas for the right price because there’s just not enough supply at the moment and there are also some units being offered too cheaply, which suggests they won’t be maintained to the required standard over the 30-year period”.
“We have our own assessment internally as to what we think a unit price should be and that’s our benchmark. Generally speaking, we’re finding there is scope for negotiation to consolidate prices or to maybe restructure the deal to make it more commercial to us.”
Bellway has acquired some of its offsite BNG units from the Alscot Estate in Warwickshire, which has been a pioneer of the BNG scheme.
Neil says the key to forging an effective relationship with landowners like the estate is “transparency” and an operation that gives him the confidence that the habitats can be delivered to the standards required. Although Neil believes there is still some misunderstanding about how it works in detail.
I think some need to properly understand what all the implications are – particularly the 30-year commitment, that’s often a surprise to landowners, who say it’s simply too long a commitment and they don’t want to create problems for future generations wanting to farmland in a more traditional way.
Group Head of Biodiversity, Bellway Homes
The absence of a centralised resource to help identify registered BNG habitat banks gives larger developers a distinct advantage over SMEs, Neil believes.
“Bellway is fortunate in that we have a dedicated in-house resource to put in the work to find the providers and develop relationships with them – an SME developer doesn’t necessarily have that so it’s not straightforward for them to find BNG units.
“We’ve got our own internal GIS-based system that shows me where the providers are – but there are resources out there online like the Future Homes Hub and the Environmental Trading Platform. The Future Homes Hub approach is the right model – we just need more people to sign up to it and grow the database.”
Neil also points to the more established habitat banks such as the Environment Bank as a good resource for finding BNG units: “They have the most options available to us in terms of sites they’ve already secured – and they understand what developers need, which is fundamental.”
Working with Barclays
Barclays providing a forum for house builders and landowners to not only discuss the legislation but also put forward best practise, is just one example of their commitment to going beyond banking.
Group Head of Biodiversity, Bellway Homes
For Bellway, Barclays' ambition to help clients see the big picture is one of the few reasons why we felt like a right fit. "The BNG legislation affects much of what we do, and whilst it's a regulatory requirement it's also our responsibility, so having a banking partner that helps us embrace change by providing the market insight we need, is essential".
"We've worked with Barclays for many years" Neil adds, "benefitting from their support with a full banking relationship and debt facilities. With legislative changes like this in our industry, expert partners are essential".
We provide a complete spectrum of solutions to enable your business to transact and trade easily, manage risks efficiently and finance its plans for growth.
To discuss your business requirements and how Barclays can support you, contact us today.
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